Eleven years after the separation, Philip Morris International (PMI) and Altria Group are expected to "fit" again.

On August 27, local time, Marlboro maker Philip Morris International announced on its official website that it is discussing with another tobacco giant Altria to merge through a full stock approach.

Philip Morris International and Altria Group were once a company. In 2008, Altria Group was split and independently listed from Philip Morris International, mainly selling Marlboro cigarettes centered on the US market, while Philip Morris International focused on Cigarette sales in overseas markets. If the merger is successfully completed, it means that Philip Morris International and Altria Group will become a company again after 11 years of independent operation.

According to the data, up to now, Philip Morris International's total market value is 114.4 billion US dollars, Altria total market value of 84.3 billion US dollars. If the merger is completed, a tobacco industry “big Mac” with a total market value of about 200 billion US dollars will be born.

According to public information, Philip Morris International is a large multinational company. It is the world's largest tobacco manufacturer and the world's second largest food manufacturer, mainly engaged in tobacco, food, beer, finance, real estate and other businesses. Including the world famous cigarette brand Marlboro.

The US tobacco industry has experienced a series of consolidations in the past decade, and the industry concentration has increased significantly. Analysts said that the Philip Morris International and Altria Group intend to merge, on the one hand to increase market share and product pricing capabilities, on the other hand, to increase the electronic cigarette market.

Before the announcement of the intention to merge, Philip Morris International issued a white paper entitled "Unsmoke: Clearingthe Way for Change", which pointed out that cigarettes are becoming a past tense and that e-cigarettes are expected to become smokers in the future. select.

In recent years, Philip Morris International, which started with traditional tobacco, has continued to reduce its traditional tobacco business and has placed its focus on developing new smoke-free products. At the end of last year, Altria spent $12.8 billion to acquire a 35% stake in Juul, an electronic cigarette factory, aimed at entering the e-cigarette market.

Why do the giants like the e-cigarette market so much? The huge blue ocean market for e-cigarettes is undoubtedly an important reason for its popularity.

According to data released by market research firm Cowen, global cigarette sales in the year of 2018 fell by 4.5% year-on-year, and the market size was about $714 billion. According to the research company MordorIntelligence data, although the e-cigarette market in 2018 is only 11 billion US dollars, it is expected to grow at an annual rate of more than 8% in the next five years. According to P&SMarket, the global e-cigarette market is expected to reach $48 billion by 2023.